dividend policy.ppt

,Irwin/McGraw-Hill,Chapter16,FundamentalsofCorporateFinanceThirdEdition,DividendPolicy,BrealeyMyersMarcusslidesbyMatthewWill,Irwin/McGraw-Hill,TheMcGraw-HillCompanies,Inc.,2001,天马行空官方博客：,TopicsCovered,HowDividendsarePaidHowDoCompaniesDecideonDividendPaymentsWhyDividendPolicyShouldNotMatterWhyDividendsMayIncreaseFirmValueWhyDividendsMayReduceFirmValue,DividendPayments,RecordDate-Personwhoownsstockonthisdatereceivedthedividend.,Ex-DividendDate-Datethatdetermineswhetherastockholderisentitledtoadividendpayment;anyoneholdingstockbeforethisdateisentitledtoadividend.,CashDividend-Paymentofcashbythefirmtoitsshareholders.,DividendPayments,StockRepurchase-Firmbuysbackstockfromitsshareholders.,StockDividend-Distributionofadditionalsharestoafirmsstockholders.,StockSplits-Issueofadditionalsharestofirmsstockholders.,DividendPayments,Jul28Aug10Aug11Aug13Sept10DeclarationWith-Ex-dividendRecordPaymentdatedividenddatedatedatedateSharepricefalls,StockDividend,Example-AmoebaProductshas2millionsharescurrentlyoutstandingatapriceof$15pershare.Thecompanydeclaresa50%stockdividend.Howmanyshareswillbeoutstandingafterthedividendispaid?Answer2milx.50=1mil+2mil=3milshares,StockDividend,Example-cont-Afterthestockdividendwhatisthenewpricepershareandwhatisthenewvalueofthefirm?AnswerThevalueofthefirmwas2milx$15pershare,or$30mil.Afterthedividendthevaluewillremainthesame.Pricepershare=$30mil/3milsh=$10persh.,StockRepurchase,Example-Cashdividendversussharerepurchase,StockRepurchase,Example-Cashdividendversussharerepurchase,StockRepurchase,Example-Cashdividendversussharerepurchase,TheDividendDecision,1.Firmshavelongertermtargetdividendpayoutratios.2.Managersfocusmoreondividendchangesthanonabsolutelevels.3.Dividendschangesfollowshiftsinlong-run,sustainablelevelsofearningsratherthanshort-runchangesinearnings.4.Managersarereluctanttomakedividendchangesthatmighthavetobereversed.,Lintners“StylizedFacts”(HowDividendsareDetermined),DividendPolicyisIrrelevant,Example-AssumeABCCo.hasnoextracash,butdeclaresa$1,000dividend.Theyalsorequire$1,000forcurrentinvestmentneeds.UsingM&MTheory,andgiventhefollowingbalancesheetinformation,showhowthevalueofthefirmisnotalteredwhennewsharesareissuedtopayforthedividend.RecordDatePmtDatePostPmtCash1,00001,000(40sh$25)AssetValue5,0005,0005,000TotalValue6,0005,0006,000#ofShares200200240price/share$30$25$25NEWSHARESAREISSUED,DividendPolicyisIrrelevant,Example-continued-ShareholderValueRecordPmtPostStock6,0005,0006,000Cash01,0000TotalValue6,0006,0006,000Stock=240sh$25=6,000Assumestockholderspurchasethenewissuewiththecashdividendproceeds.,DividendsIncreaseValue,MarketImperfectionsandClienteleEffectTherearenaturalclientsforhigh-payoutstocks,butitdoesnotfollowthatanyparticularfirmcanbenefitbyincreasingitsdividends.Thehighdividendclientelealreadyhaveplentyofhighdividendstocktochoosefrom.Theseclientsincreasethepriceofthestockthroughtheirdemandforadividendpayingstock.,DividendsIncreaseValue,DividendsasSignalsDividendincreasessendgoodnewsaboutcashflowsandearnings.Dividendcutssendbadnews.Becauseahighdividendpayoutpolicywillbecostlytofirmsthatdonothavethecashflowtosupportit,dividendincreasessignalacompanysgoodfortuneanditsmanagersconfidenceinfuturecashflows.,DividendsDecreaseValue,TaxConsequencesCompaniescanconvertdividendsintocapitalgainsbyshiftingtheirdividendpolicies.Ifdividendsaretaxedmoreheavilythancapitalgains,taxpayinginvestorsshouldwelcom